John Williams, of the Food and Fibre Supply Chain Institute, says a recent Senate committee decision to recommend the ACCC reopen an investigation into the sale of GrainCorp to US commodities giant Archer Daniels Midland is sending a message that foreign investment is not welcome in Australia.

"Well, here's a major case where we've badly needed investment into our grains supply chains for decades and here is a clear sort of signal from our politicians and some farmer organisations that we don't need, or don't want foreign direct investment in Australian agribusiness."

The National Party has been outspoken against the proposed takeover.

Mr Williams says talk of further regulation of foreign investment by political leaders could send potential investors elsewhere.

"I mean that's going to have spill-over effects into other agricultural enterprises and it sends a clear message that foreign direct investors will go elsewhere, rather than Australia."

Rather than discouraging foreign investors, Mr Williams says Australian agriculture should be doing all it can to encourage more foreign investment.

He cites the Foreign Investment Review Board's annual report for 2011- 2012 which shows just 2 per cent of all board approved foreign direct investment in Australia was made in agriculture. In contrast, the mining sector attracted 30 per cent.

The largest source country of investment in agriculture was Canada ($1.4 billion), followed by the United Kingdom ($0.6 billion) and the United States.

The board acknowledged the important role foreign investment plays in Australian agriculture.

"Without foreign capital inflows, investment in Australia would be limited, resulting in lower food production with potentially higher food prices, as well as lower employment, lower incomes in the sector and lower Government revenue. Foreign investment in agriculture supports agricultural production, job creation and contributes to the prosperity of rural communities and the broader Australian economy."

Mr Williams says Australian agriculture is not attracting sufficient capital domestically and the deficit must come from foreign investment.

But he blames an anti-foreign investment attitude on discouraging potential investors.

"Well, I think it's our current attitude. I mean, when you get a number of farmer organisations very much against foreign investment and you get politicians who are putting it on top of the policy list in terms of being very, very anti-foreign investment, then the message is flowing through to overseas countries and particularly their investors that Australia is not a country to invest in, particularly in agribusinesses."

Grains industry consultant Ron Storey says the jury is still out on whether foreign investment has significantly benefited infrastructure in the grains industry.

"If you look at what's happened in the last five years since the deregulation of the export wheat market, there has been a lot of foreign trading companies investing in Australia, or buying businesses in Australia.

"To date there certainly has been some new investment. If you look at what the Emerald group have done, they have clearly put more assets on the ground and in the last 12 months have put on trains, so there has certainly been an addition of infrastructure go in there.

"I think the Viterra experience going back four or five years ago in South Australia, I think initially they got a bit of a baptism of fire in year one.

"It was a rough harvest with a lot of grower concerns about the way things happened there, but I think subsequent to that Viterra really did put in quite a big effort of upgrading their service.

"So it's early days. Only five years is a terribly short time in agriculture."

Mr Storey says what is clear is that the industry is in need of investment.

"There is a logical, local, parochial reaction to not having it locally owned.

"But I think we need to look at it in the context that someone has to put the money in, and if we can't get local investors to put it in, I don't hear anyone arguing that we don't need the investment in these assets.

"The money's got to come from somewhere and we get the benefit of that. I think that's what we've got to look at from a long-term perspective."